Buy Now, Pay Later: The Debt Trap You Should Never Use
When You're Financing Your Burrito, We've Gone Too Far
In March 2025, DoorDash announced a partnership with Klarna that lets customers finance their food delivery orders. Yes, you read that correctly. Americans can now take out installment loans to pay for burritos and pizza deliveries.
The internet responded with mockery and memes, but the joke isn't funny. It's terrifying. When people need payment plans for takeout, we've crossed a line from financial convenience into financial desperation.
This is where the "buy now, pay later" industry has led us. What started as a way to finance big purchases has morphed into a system that encourages people to go into debt for groceries, cleaning supplies, and Happy Meals.
Today we're going to examine how Buy Now, Pay Later (BNPL) services are deliberately designed to trap consumers in cycles of small debts, why they're worse than credit cards, and why you should never use them, not even once.
The Debt Expansion Timeline: How We Got Here
It wasn't always like this. Americans used to buy things with money they actually had.
For most of our history, debt was reserved for truly major purchases that required years to save for:
Houses (1930s onward): Mortgages made sense because few people could save tens of thousands in cash. Homes also typically appreciate in value.
Cars (1950s onward): Auto loans became common because cars were expensive necessities for work and family life. At least cars have resale value.
Home improvements and appliances (1960s-70s): Financing a new roof or refrigerator was reasonable for homeowners building equity.
Credit cards for everything else (1980s-90s): Suddenly, Americans were putting vacations, furniture, and electronics on credit cards. Debt became normal.
Specialized financing (2000s-2010s): Store cards, payday loans, and "no payments for 12 months" deals proliferated. Every purchase became a financing opportunity.
Buy Now, Pay Later (2010s-present): The final frontier. Now you can finance literally anything in four easy payments, including your lunch.
Notice the pattern? Each generation of Americans accepted debt for smaller and smaller purchases. What our grandparents would have considered financial insanity (taking out loans for groceries) we now treat as normal consumer behavior.
The BNPL Explosion: The Numbers Are Staggering
The buy now, pay later industry has experienced explosive growth that should alarm anyone concerned about consumer debt:
The global BNPL market grew from $39.65 billion in 2024 to a projected $435.25 billion by 2033, a 1,000% increase in less than a decade (source)
86.5 million Americans used BNPL services in 2024, up nearly 7% from the previous year
US BNPL transaction volume is expected to reach $184.1 billion by 2030, up from $109 billion in 2024
This isn't sustainable growth. It's a debt bubble that's being inflated by companies that profit from consumer financial distress.
When BNPL Invaded the Grocery Store
The most disturbing trend in BNPL usage is its expansion into everyday necessities:
Groceries: 25% of BNPL users now finance grocery purchases, up from just 14% last year. Among Gen Z users, that number jumps to 33%. (source)
Food delivery: 16% of BNPL users finance restaurant delivery and takeout orders. Two-thirds say they'd consider it.
Basic necessities: People are using BNPL for cleaning supplies, contact lenses, trash bags, and other household essentials.
This isn't financial innovation. It's financial desperation disguised as convenience. When you need a payment plan for groceries, you're not managing cash flow. You're broke.
The Government Isn't Helping
Rather than protecting consumers from predatory lending, the administration has made the problem worse by deregulating BNPL companies.
In early 2025, the Consumer Financial Protection Bureau stopped enforcing rules that would have treated BNPL providers like credit card companies. This eliminated requirements for:
Stricter disclosure requirements
Standardized dispute resolution processes
Enhanced consumer protections
Clearer fee structures
The timing couldn't be worse. Just as millions of Americans are falling behind on BNPL payments and using these services for basic necessities, the government removed the guardrails designed to protect them.
How BNPL Companies Profit From Your Desperation
BNPL companies have built a business model around exploiting financial vulnerability:
Merchant fees: Retailers pay 2-7% of each transaction to BNPL providers. This cost gets built into prices, so even cash customers subsidize BNPL users.
Volume over margins: They approve almost everyone because they profit from the aggregate flow of transactions, late fees, and data, not individual creditworthiness.
Data harvesting: BNPL companies collect detailed purchasing data to sell to marketers, employers, and other companies. Your grocery purchases become their product.
Repeat customer addiction: They profit when you become a habitual user who gradually normalizes taking on debt for smaller and smaller purchases.
Partnership revenue: Companies like DoorDash pay BNPL providers to integrate their services, creating new debt opportunities at every checkout.
The business model is elegant in its exploitation: make borrowing money so psychologically painless and logistically frictionless that people accumulate multiple small debts without realizing they're financially overextended.
The Behavioral Trap: How BNPL Makes You Spend More
The data on BNPL's impact on spending behavior is damning:
68% of BNPL users admit they "typically buy more than I would have if I had to pay for everything upfront" (source)
58% use BNPL to finance purchases they otherwise couldn't afford (source)
57% use BNPL specifically to "stretch their cash flow" between paychecks
This isn't cash flow management. It's manufactured affordability for things you can't actually afford.
Research from Harvard Business School found that first-time BNPL use was associated with total spending increases of around $130 and remained elevated for 24 weeks after that first use. BNPL doesn't just change how you pay; it changes how much you spend. (source)
The Debt Cycle: Multiple Loans and Missed Payments
BNPL's biggest lie is that it's "simple" and "easy to manage." The reality is chaos:
Multiple active loans: Nearly 25% of BNPL users have three or more active loans at once. Some have many more across different platforms.
Lost track of payments: Nearly one in three BNPL users have lost track of payments they owe. This is a clear sign the system is too complex for consumers to manage.
Rising late payments: 42% of BNPL users have made late payments, with that number increasing every year. Among the late payers, 25% were charged fees or interest.
Spillover effects: Research shows BNPL use increases the likelihood of overdraft fees, NSF fees, and dipping into savings accounts.
The "simple four payments" promise becomes a nightmare of overlapping due dates, multiple apps, and forgotten obligations.
The Credit Score Lie
One of the most insidious aspects of BNPL marketing is the implication that these services help build credit. This is false, and 62% of users are dangerously misinformed about it.
The truth about BNPL and credit scores:
Most BNPL payments are NOT reported to credit bureaus
On-time payments typically don't help your credit score
Some providers DO report missed payments, which can hurt your score
You get all the downside risk with none of the upside benefit
If you want to build credit, get a secured credit card or become an authorized user on someone else's account. Don't use BNPL services based on the false promise of credit building.
Why BNPL Is Worse Than Credit Cards
I've written extensively about the dangers of credit card debt, but BNPL services are actually worse in several key ways:
Fewer consumer protections: Credit cards offer dispute rights, fraud protection, and return policies. BNPL services often don't.
No credit building: At least credit cards can help build your credit history when used responsibly.
Multiple payment streams: Credit cards consolidate debt into one monthly payment. BNPL creates multiple payment schedules across different platforms.
Hidden complexity: Credit card terms are regulated and standardized. BNPL terms vary wildly between providers.
Impulse-friendly integration: Credit cards require a deliberate decision to apply for credit. BNPL appears automatically at checkout.
Lower barriers: Credit cards require income verification and credit checks. BNPL approves almost everyone instantly.
The Warning Signs You're in Trouble
If any of these apply to you, BNPL is already damaging your finances:
You have more than one active BNPL loan
You've used BNPL to buy groceries or other necessities
You've missed or been late on BNPL payments
You use BNPL as a "bridge" between paychecks
You've taken BNPL loans to avoid using a credit card
You can't afford to pay for purchases upfront
You've lost track of how many BNPL payments you owe
These aren't signs of smart money management. They're symptoms of financial distress.
What to Do Instead
The solution to BNPL temptation is simple but not easy:
Build an emergency fund: Even $500 in savings eliminates the need to finance unexpected expenses.
Use cash or debit only: If you can't afford something today, wait until you can.
Delete BNPL apps: Remove the temptation by making it harder to access these services.
Budget for purchases: Plan major purchases in advance instead of financing them impulsively.
Address underlying issues: If you're using BNPL for groceries, you have an income problem, not a payment problem.
Use credit cards responsibly if needed: If you must use credit, at least use a tool that builds your credit score and offers consumer protections.
The Bottom Line
Buy now, pay later services are designed to exploit your psychological weaknesses and financial vulnerabilities. They make debt feel painless while actually making your financial situation worse.
The companies behind these services are not your friends. They profit when you struggle to make payments. They win when you take on multiple loans. They succeed when you use debt to buy groceries.
The only winning move is not to play.
If you can't afford something today, the solution isn't a BNPL loan. The solution is to either save up for it or decide you don't actually need it.
Don't finance your burrito. Don't take payment plans for groceries. Don't let BNPL companies turn your everyday purchases into recurring debt obligations.
Your future financial self will thank you for paying cash and living within your means today.
Your homework: Delete any BNPL apps from your phone and calculate how much you've spent on late fees, overdraft fees, and impulse purchases driven by "easy payments." The number might shock you into better habits.
Here's to buying things with money you actually have,
Max